Students ID#: Students name: ABBDI Date: December 8th,

52115607 Heba 2016

Rise and Fall or Transformation?
The Evolution of Strategic Planning at the General Electric Company, 1940-
2006
Strategic planning is one of the most important planning tools on top
management and strategic decision making levels. The Rise and Fall or
Transformation? The Evolution of Strategic Planning at the General Electric
Company, 1940-2006 is an impressive account of the evolution of strategic
planning practices at General Electric (hereafter as: GE), a company that is
considered as the early developer of corporate strategic planning. It emphasizes
that strategic planning is an enduring and evolving managerial practice, rather
than a fad, that is heavily influenced by the CEOs.

The article represents a major challenge to the one of the most widely accepted
versions of successful stories by big businesses how GE Company espoused and
then ditched strategic planning. It seeks a clear understanding of how strategic
planning evolved at GE, and provides insights on the broader question of its rise,
fall and transformation in other large corporations.

In the article, the authors addressed the following questions:

In what form has strategic planning survived? How has strategic planning
practice changed? how is it practiced in large corporations today? and can formal
strategic planning still benefit large, multi-business corporations?

In order to answer these questions, and to understand the evolution of strategic

planning at GE, the authors discussed the history and evolution of strategic
planning at GE, covering the regimes of six consecutive CEOs over nearly 70
years, since 1940 to 2006, which effectively explodes the FIFO first in/first out
simplification. They explored and examined the ways of managing and the
evolution of the planning processes and practices at GE before it formally
became known as strategic planning.

This article shows how GE's systems of strategy formulation, decision making and
control have been the subject of incremental change, rather than of radical
transformation. Thus, it is revealed how awareness of the deeds of CEOs, and of
the adoption of particular planning technologies, decentralization, SBU planning,
Six Sigma etc., has blinded previous commentators to the fundamental continuity
of prevailing practices over the period.
The history of strategic planning at GE has several implications for contemporary
strategy making:

1. The practice of strategic planning cannot remain static but must evolve to
facilitate changes in corporate agenda and management style.

2. The CEOs involvement in design of the strategic planning system is

critical to its endurance and centrality.

3. Specialized governance channels for decision-making and communications

focus attention of corporate executives on distinct, yet critical, planning
tasks to shape the corporate agenda.

4. Fourth, the tight coupling of information and communication flows across

governance channels is critical for the overall integration and
effectiveness of the strategic planning system.

In conclusion, understanding the evolution of a strategic planning system

requires not only examining the adoption, transformation or abandonment of its
components, but also how changes in practices interact with other parts of the
system. Strategic planning is the answer to increase the firm's performance.
Companies who fail to establish strategic planning will have less bargaining
position and power to compete against established rivals and potential
competitors.